A travel money card is a card you use for spending while you are overseas, separate from your everyday account. They all do roughly the same job at the checkout, but they are built differently underneath, and that difference decides what you pay and how much control you keep.
Prepaid travel cards
A prepaid travel card is loaded with money before you leave, and you can only spend what is on the card. Think of it as a spending pot with a set balance. The key points:
- You load first, then spend. There is no borrowing, so there is no debt to build up while you travel.
- It holds one currency. Most prepaid cards are set up in one currency, often the currency of the country you are heading to or in New Zealand dollars with conversion when you spend.
- Limits your exposure. If the card is lost or skimmed, the damage is capped at what was loaded, not the balance of your whole bank account.
- Top-ups needed. When the balance runs out, you have to add more, which can take time and can carry a fee depending on the provider.
Prepaid cards suit people who want a firm travel budget and do not want to spend against credit while away. The trade-off is that you must manage the balance and reload it, and some providers charge for loading or inactivity.
Multi-currency cards
A multi-currency card is a step up. Instead of holding a single currency, it holds several balances at once, for example New Zealand dollars, US dollars and euros. You switch between them before you spend, which is where the value usually comes from:
- Lock in rates in advance. You can convert into a currency when the exchange rate suits you, rather than at the point of sale.
- One card, many destinations. For a trip that crosses several countries, you avoid converting everything twice or paying a fee each time the currency changes.
- More moving parts. You have to track which balance you are spending from and top up the right currencies, which takes a little more attention than a simple single-currency card.
Multi-currency cards suit longer trips, regular travel or anyone who cares about controlling the exchange rate they pay. If you only travel once a year for a short time, the extra control may not be worth the extra tracking.
Credit cards for overseas
A credit card designed for overseas spending is a different animal. It is not preloaded; you are spending on credit and paying it back later. Points in favour:
- Convenient backup and large payments. Useful for car hire, hotels and bigger purchases where a prepaid balance might not be enough.
- Fraud protection. You are generally not liable for unauthorised transactions, and you can dispute charges.
- You borrow money. Interest applies unless you clear the balance, and overseas cash advances can attract charges and higher interest.
The honest catch is that using credit overseas adds fees and interest risk on top of the exchange rate. A credit card works well as a second card rather than your only way of spending.
How they compare with your bank card
You can almost always use your normal bank card overseas, so the real question is whether a dedicated travel card earns its keep. The differences:
- Separation. A travel card keeps holiday money out of your main account, so a breach does not reach your savings.
- Exchange control. Travel cards, especially multi-currency ones, let you set the rate in advance instead of accepting whatever the network gives you on the day.
- Cost structure. A bank card typically adds overseas transaction fees on top of the currency conversion. A travel card shifts the cost into upfront fees, loading fees or a margin in the rate, so you have to read the fee schedule either way. Our guide to travel card fees and exchange rates covers this.
How to choose between them
There is no single best card for everyone. Choose based on how you actually travel:
- Short trip to one country, want a firm budget. A simple prepaid card is hard to beat.
- Multiple countries, longer trips, or you care about exchange rates. A multi-currency card gives you the most control.
- Large payments, car hire, or you want a safety net. Add a credit card designed for overseas spending as a backup.
- Carry two cards. Whatever you choose, carrying a spare protects you if one is lost, blocked or runs out of funds.
Travel cards break into three useful types: prepaid, multi-currency and overseas credit cards. Match the type to how you travel, and check the fee schedule before you pick. Once you know the type, the next step is understanding what each transaction costs, which is covered in our fees and exchange rate guide.